Spain unions march peacefully against austerity

Source: Reuters - Tue 6th Sep 2011

Thousands of union workers marched peacefully in Madrid on Tuesday to protest against austerity measures and a rushed constitutional reform to cap government spending, which they say threatened social programmes.

The workers and members of the youth Indignados movement gathered in Puerta del Sol square - ground zero for anti-government protesters in Spain - in the evening carrying banners reading "I don't want any change to the constitution."

Union leaders said 25,000 people took part but witnesses said the turnout was about half that.

The protest, organised by Spain's two main union federations, the CCOO and UGT, came a day before Spain's Senate is due to change the constitution to limit structural deficits in central and regional governments.

On the same day workers across Italy held strikes protesting against government austerity plans being debated today by Italy's senate. C ountries around Europe are slashing spending to try to stem the euro zone debt crisis.

"As a result of the labour reform and the proliferation of temporary contracts, there are not going to be any workers with permanent jobs. Young people have been given a real kick in the teeth ," said marcher Luis Gomez, a 59-year-old mathematics teacher.

Youth unemployment tops 40% in Spain and one in five workers are jobless, the highest rate in the EU.

Earlier this year, members of disaffected youth groups known as the Indignados - or Indignant - camped out for weeks in Puerta del Sol in protests against Spain's political system, but the movement lost some momentum over the summer.

CONSTITUTIONAL REFORM

The constitutional reform is likely to pass as both the Socialist government and the centre-right People's Party support it and the lower house has already overwhelmingly approved the measure.

Union protests have had little influence on Spain's commitment to austerity measures and a general strike last year drew limited support from workers.

Spain's two main political parties struck a rare political truce over the constitutional debt limit, arguing it was essential to show markets Spain was serious about managing its debt.

Smaller parties, such as the United Left and the Catalan and Basque nationalists, are against the move.

They say the reform would break a parliamentary deal struck when Spain became a democracy in 1978 - three years after the death of dictator Francisco Franco - and they demand a referendum on what would be only the second change to the constitution since then.

Last month Spain's bond yields came perilously close to levels which forced Greece and others to ask for bailouts, and recovered only after a sustained campaign of bond buying by the ECB.

Spain's deficit is at the heart of concerns it may need a bailout like Greece, which has been plagued by social unrest over austerity measures.

Union leaders and the Spanish government sparred publicly ahead of the protest, wi th CCOO General Secretary Ignacio Fernandez Toxo saying that Zapatero had warned him in August that the country was close to needing a bail-out. The union leader later said he had misspoken.

"A rescue is totally out of the question," Economy Minister Elena Salgado said on Tuesday.

She said the country's risk spread - which measures the difference between interest rates on German and Spanish benchmark bonds on secondary markets - should not be higher than 150 basis points based on economic fundamentals.

Spain's borrowing costs have soared since early 2010 and the spread was at roughly 340 basis points on Tuesday.

Spain has pledged to bring its headline public sector shortfall, one of the highest in the euro zone, down to 3% of GDP by end-2013, in line with EU guidelines and expects to have cut it to an expected level of about 6% of GDP at the end of this year from 11.1% in 2009.